A securities trading mechanism can be thought of as a set of protocols that translate a group of investors' latent demands into realized prices and quantities. In addition to the national and regional exchanges, there exist a number of proprietary equity trading mechanisms, such as ECNs (Electronic Communication Networks) which are tailored to handle the specialized needs of sophisticated investors and traders.
Algorithmic trading, or so-called “program trading,” has been known for many years. According to such program trading, various factors such as timing, volume, individual price trends, market trends, sector trends, etc. are taken into account according to a series of rules defined by the algorithm which then determine whether to enter trade orders and what parameters to select for those trade orders. The factors considered and the manner in which those factors are incorporated or weighted in a trading algorithm are a function of the particular strategy developed by the investor.
The present invention enables trade orders to be managed and executed automatically according to one or more of a number of specific trading strategies by implementing multiple developed strategies into a number of servers and transmitting orders to a particular server running the desired trading strategy.